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April 15 is here again. For many people the day heralds a tax refund. But what are they celebrating? That they loaned the government money interest-free in 1996? Why is it that if the government doesn’t withhold enough tax, you may owe interest, but if the government withholds too much, you get zip?

Those are just some small objections to our system of income taxation. Take withholding. Isn’t there something unseemly about the government’s getting its hands on your money before you do? I know the arguments about efficient collection. But efficiency doesn’t trump justice. It’s your money. You earned it by the sweat of your brow. How dare the government order your employer to turn it over directly to the Internal Revenue Service and then make you prove that you should get it back? It’s not right.

Even without withholding, the income tax is an odious form of taxation. It justifies the government’s sticking its nose into everything. If the government is going to tax income, it must know what your income is. If it is to know what your income is, it must have the power to learn everything it can about you. After all, you could be making money off the books and escaping tax. You can’t have financial privacy with the income tax.

At this time of year the IRS likes to tout that the income tax is “voluntary.” If you want a good laugh, read the IRS commissioner’s letter at the front of your tax return. The income tax is called voluntary because you compute your liability and tell the government what you owe. Presumably an involuntary tax would be one in which the government tells you how much you owe. You undoubtedly appreciate the Orwellian use of the word “voluntary.” The income tax is about as voluntary as mortality. If the IRS disbelieves what you file, it can make your life hell by going through your records and demanding that you prove every claim you made. Does the word “audit” strike fear in you? It’s supposed to. If you haven’t kept immaculate records you may have to pay lots of money in penalty and interest, not to mention the tax itself.

Record-keeping is another objectionable part of the income tax. The government forces you to keep records you have no other reason for keeping. Are you compensated for that involuntary servitude? Not a chance.

The hair-raising complexity of the tax code is well known. Who knows what’s in the code, except for a few wonks at the IRS? The rest of us are in the woods with a blindfold and bear traps all around. It would be impossible not to violate the law.

But we should not let that complexity seduce into us into supporting a mere simplification of the income tax. We need to keep our eye on the ball, which is the taxation of income itself.

Here’s an interesting exercise: try to come up with a definition of “taxation” that would not also apply to simple theft. When the government taxes you it compels you under threat of force to surrender your money–your property. If anyone else does that we call him a thief. Why does the government escape that label? Because we get services in return? How many of those services would you voluntarily buy? Not many, I’ll bet. Let’s face it, most of what government does is transfer wealth from one person to another. (Any real services could be paid for voluntarily.) The tax system is a mainly a big machine for shifting wealth. Taxes are not the price of services. Taxes are the dollars taken from those who earn them and given to those who don’t.

On Tax Day 1997 let’s meditate on what this day really means. The average American works into May each year just to pay taxes at all levels of government. In the country founded by Madison and Jefferson, that is outrageous. When will we demand that it stop?

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Sheldon Richman is former vice president and editor at The Future of Freedom Foundation and editor of FFF's monthly journal, Future of Freedom. For 15 years he was editor of The Freeman, published by the Foundation for Economic Education in Irvington, New York. He is the author of FFF's award-winning book Separating School & State: How to Liberate America's Families; Your Money or Your Life: Why We Must Abolish the Income Tax; and Tethered Citizens: Time to Repeal the Welfare State.
Calling for the abolition, not the reform, of public schooling. Separating School & State has become a landmark book in both libertarian and educational circles. In his column in the Financial Times, Michael Prowse wrote: "I recommend a subversive tract, Separating School & State by Sheldon Richman of the Cato Institute, a Washington think tank... . I also think that Mr. Richman is right to fear that state education undermines personal responsibility..."
Sheldon's articles on economic policy, education, civil liberties, American history, foreign policy, and the Middle East have appeared in the Washington Post, Wall Street Journal, American Scholar, Chicago Tribune, USA Today, Washington Times, The American Conservative, Insight, Cato Policy Report, Journal of Economic Development, The Freeman, The World & I, Reason, Washington Report on Middle East Affairs, Middle East Policy, Liberty magazine, and other publications. He is a contributor to the The Concise Encyclopedia of Economics.
A former newspaper reporter and senior editor at the Cato Institute and the Institute for Humane Studies, Sheldon is a graduate of Temple University in Philadelphia. He blogs at Free Association. Send him e-mail.

Reading List

Prepared by Richard M. Ebeling

Austrian economics is a distinctive approach to the discipline of economics that analyzes market forces without ever losing sight of the logic of individual human action. Two of the major Austrian economists in the 20th century have been Friedrich A. Hayek, who won the Nobel Prize in Economics, and Ludwig von Mises. Posted below is an Austrian Economics reading list prepared by Richard M. Ebeling, economics professor at Northwood University in Midland and former president of the Foundation for Economic Education and vice president of academic affairs at FFF.